Why Medical Malpractice Fails

Author: Samuel Metz

Date: 01/16/2007

Medical malpractice insurance is not a solution. It is a problem.

Many observers advocate reform. But this system is worse than a failure. It endangers fair compensation of medically injured patients. It cripples all attempts to improve health care. Reform will not work. Replacement is essential.

What do we expect of our medical malpractice system? Two goals: We want families of medically injured patients to receive help. And we want physicians to learn and implement methods to reduce medical injuries.

Our current system does neither. Instead of solving problems, it creates new ones:

1. Only a small fraction of medically injured patients, less than 3%, receive any compensation at all.1 Medically injured patients must initiate legal proceedings to gain any hope of compensation. Only medical injuries proven in court to result from negligence may receive compensation. As most medical errors are not negligent care, most injured patients receive nothing. And as negligence is determined by a jury of lay persons, not professionals, unpredictably legal outcomes are common.

2. It operates with shameful inefficiency with less than half of funds paid in insurance ever making it to patients or families.2, 3 Workman's Compensation, hardly a model of bureaucratic efficiency, manages to return over 80% of collected funds to injured patients.

3. Certain specialty physicians find it financially untenable to practice, leaving many areas without specialty medical care.4 Higher insurance premiums plague these specialties not because they are rife with negligent physicians, but because they care for sicker patients more likely to suffer a bad outcome regardless of care. Do we believe that neurosurgeons pay more for insurance than pediatricians because they are more incompetent?

4. Physicians are encouraged to direct their practice toward improving their own legal outcome, sometimes at the cost of patient's medical outcome. One example: most obstetricians still use electronic fetal monitoring despite absent evidence that it improves neonatal outcome and disturbing evidence that it increases maternal mortality.5

5. Finally it corrupts public confidence in medical care as physicians and patients become adversaries, not partners, in health care.

Given its failure to fairly compensate patients for medical injury, does our medical malpractice system at least improve medical care?

None of the $7 billion spent for malpractice premiums3 nor the $5 billion to $25 billion spent for defensive medicine6 goes to quality improvement. Physicians divert financial resources from patient safety to legal protection. In Florida, which passed a law compelling physicians to surrender their license after a third malpractice judgment, physicians are highly motivated to rapidly settle out of court any claim, no matter how trivial.7 Plaintiff's attorneys are even more highly motivated to pursue any claim, knowing that an out of court settlement may be offered regardless of merit. All these interactions cost money, money that cannot be spent on quality improvement.

In fact, physicians now practice in a climate of culpability, in which avoiding blame for a patient outcome consumes extensive social capital. When any discovered medical error or bad outcome can produce an adverse malpractice judgment, physicians decline participation in practice improvement programs.8 Quality improvement evaporates. Progress in patient care freezes as current care dictated by malpractice judgments becomes the immutable standard of care. Medical progress slows to a glacial crawl.

What is to be done?

Abandon reform. Start over. Separate our goals. Focus on compensating patients equitably and improving our medical environment - without making these goals mutually exclusive.9

We are not yet ready to abandon our current medical malpractice system. Why? The public still perceives, correctly, that our current medical malpractice system is the only mechanism, however erratic, to receive compensation for medical injuries. The public also perceives, incorrectly, that our current system is their only protection from medical errors.

We need two independent mechanisms to address these issues before the public will tolerate the retirement of our current system, however counterproductive.

First, compensate medically injured patients regardless of negligence. If patients need only demonstrate to an impartial board that a medical injury produced a financial hardship, then physicians can return to being patient advocates rather than patient adversaries. Working models abound both in the United States and elsewhere, too many to list here; it's simply a matter of making the effort to determine which one to try first.

Second, create a medical environment in which the detection, reporting, and analysis of errors are welcomed by physicians because error analysis is independent of fault finding. Our current State medical boards, hospital quality improvement committees, and some professional specialty organizations can devote themselves at full power to patient safety if physicians know that participation will be rewarded, not punished. We can even imagine a completely new organization, modeled on the National Transportation Safety Board. This new organization could investigate all medical errors with intent not of assigning blame but with of recommending improvements in health care delivery. Such a national review organization could produce powerful effects on patient care only if fear of litigation did not hamper its efforts.

We have a wealth of solutions available to both compensate medically injured patients and improve medical care. Once we make these solutions work, our current medical malpractice system becomes obsolete. Few will be sorry to see it go.


1. Localio AR, Lawthers AG, Brennan TA, et al. Relation between malpractice claims and adverse events due to negligence: results of the Harvard Medical Practice Study III. N Engl J Med 1991;325:245-51.

2. Kakalik JS, Pace NM. Costs and compensation paid in tort litigation. R-3391-ICJ. Santa Monica, Calif.: Institute for Civil Justice, RAND, 1986.

3. Hartwig RP, Wilkinson C. Medical Malpractice Insurance, Insurance Information Institute, June 2003, [link] accessed 15 January 2007

4. Bean JR. “Current Issues Related to Medical Liability Reform” testimony before the House Energy and Commerce Health Subcommittee representing the Alliance of Specialty Medicine, February 10, 2005, (link no longer valid) accessed 16 January 2007

5. Kripke CC. Why are we using electronic fetal monitoring? American Family Physician, 1999; 59:2416-18, [link]  accessed 16 January 2007

6. Rubin RJ, Mendelson DN. How much does defensive medicine cost? J Am Health Policy 1994;4:7-15

7. "Florida Passes Three-Strikes Malpractice Law" New York Times, November 26, 2004. [link] accessed 16 January 2007

8. Bovbjerg RR, Miller RH, Shapiro DW. Paths to reducing medical injury: professional liability and discipline vs. patient safety — and the need for a third way. J Law Med Ethics 2001;29:369-80.

9. Studdert DM, Mello MM, Brennan TA. Medical malpractice. N Engl J Med 2004; 350:283-292

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